01 / START WITH YOUR NUMBERS
How to use the commercial mortgage calculator
Enter the value and deposit
The value less the deposit becomes the opening mortgage. Enter only the cash deposit against the property here, rather than combining it with legal costs or taxes.
Choose how to repay
Choose repayment to clear the capital over the term, or interest-only to leave it outstanding. Enter a nominal annual interest rate and a whole number of years.
Include the arrangement fee
Enter the fee in pounds. This version assumes you pay it upfront, so the fee increases the full cost but does not change the monthly mortgage payment. A fee added to the loan would need a different calculation.
02 / THE NUMBERS IN PRACTICE
A worked example
The example is a £500,000 property with £150,000 paid as a deposit. It models £350,000 borrowing over 20 years at 7% annual interest, with a separate £5,000 upfront arrangement fee.
£2,713.55
- Amount financed
- £350,000.00
- Loan to value
- 70.00%
- Total interest
- £301,251.11
- Arrangement fee
- £5,000.00
- Final balance
- £0.00
- Repayments plus arrangement fee
- £656,251.11
Fixed illustration using the starting inputs, separate from the live calculator above. Displayed amounts are rounded.
Monthly interest is annual interest divided by 12. The arrangement fee is paid upfront, not financed. Excludes VAT on the property, tax, legal and valuation costs.
03 / UNDERSTAND YOUR RESULT
Keep purchase costs and borrowing costs separate
The mortgage total includes repayment of the capital, interest and the arrangement fee entered. It does not include the deposit, property taxes or VAT that might apply to a transaction. Adding these together yourself helps avoid mistaking a financing total for the full cash needed to acquire the premises.
For example, increasing the upfront fee by £1,000 adds £1,000 to the total shown. It does not increase monthly payments in this model because the fee is not borrowed. Check how the lender actually collects each charge.
04 / UNDERSTAND YOUR RESULT
Check the capital repayment plan
An interest-only result can look attractive on a monthly basis because the capital is deferred. If the opening loan is £350,000, the final capital balance remains £350,000 in this model. Interest paid along the way is an additional cost.
This tool does not assess rental cover, trading income, security, guarantees or property suitability. A fixed numerical example cannot capture the terms of a commercial lending decision. Use the lender's proposed schedule when comparing an actual facility.
PLAIN ENGLISH, PLEASE
Commercial mortgage glossary
The terms behind the inputs and results, explained without the guesswork.
- Commercial mortgage
- Borrowing secured on a business property. This tool models a level-payment or interest-only structure.
- Deposit
- The part of the property value funded without this mortgage.
- Arrangement fee
- The charge entered for arranging the mortgage. Here it is paid upfront and not financed.
- LTV
- The opening mortgage as a percentage of the property value entered.
- Capital
- The original amount borrowed. Repayment mode gradually reduces it; interest-only mode does not.
- Final balance
- The outstanding capital due at the end of an interest-only term, separate from regular interest payments.
BEHIND THE ESTIMATE
How the calculation works
The opening loan equals property value less deposit. We use annual interest ÷ 12 and term × 12 to calculate repayment mortgage instalments. For interest-only, the monthly charge is the loan multiplied by the monthly rate.
Total mortgage payments include any final capital balance. The upfront arrangement fee is then added once. Rates remain constant; property acquisition taxes, legal costs, valuation costs, insurance and interest on fees are excluded.
Sources and further reading
Examples use Switcha’s calculation model above. Supporting information and linked guidance checked on 10 September 2026.